Improvement in profitability and outperformance against the industry can be important characteristics in a stock for some investors. Below, I will assess Bridgford Foods Corporation’s (NASDAQ:BRID) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers. See our latest analysis for Bridgford Foods
Was BRID’s recent earnings decline indicative of a tough track record?
I use data from the most recent 12 months, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This blend enables me to examine different companies on a similar basis, using the most relevant data points. “For Bridgford Foods, its “, most recent earnings is $8.4M, which, relative to the prior year’s figure, has sunken by a significant -47.64%. Given that these figures are fairly myopic, I have estimated an annualized five-year figure for BRID’s net income, which stands at $4.4M. This shows that though earnings growth was negative from the prior year, over the long run, Bridgford Foods’s profits have been growing on average.
What’s the driver of this growth? Let’s take a look at whether it is solely because of an industry uplift, or if Bridgford Foods has seen some company-specific growth. Over the past few years, Bridgford Foods expanded its bottom line faster than revenue by efficiently controlling its costs. This resulted in a margin expansion and profitability over time. Viewing growth from a sector-level, the US food industry has been growing, albeit, at a muted single-digit rate of 5.66% in the past year, and 7.76% over the previous five years. This means whatever tailwind the industry is deriving benefit from, Bridgford Foods has not been able to realize the gains unlike its average peer.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies are profitable, but have volatile earnings, can have many factors influencing its business. You should continue to research Bridgford Foods to get a better picture of the stock by looking at:
1. Financial Health: Is BRID’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
2. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.